Every business employs people who are key to their success. One of the challenges we face as business owners is how to retain these key individuals if a “triggering event” (death or disability of the owner, sale of the business) occurs.
When you are not able to work or are transitioning ownership of your business to another party, those who do your day-to-day work are integral to the continued value of the business.
Key Person Retention includes strategies or programs you can implement to ensure your key staff will stay through any transitions your business may experience. We often suggest that our Clients use a “stay bonus” to make sure their key people stay with the company if it goes into transition.
If you decide to sell your business to another party, the prospective new owner is more interested in your key people than in you. Having agreements in place that reward those key people for staying can mean the difference of thousands of dollars of added business value.
Many business owners feel that disability or death will never happen to them. Unfortunately, both incidents happen more often than you think. We believe you should consider planning for the possibility of your key people running your business if something unexpected should happen to you. If, after consideration, you believe having a solution for handling the potential of a “triggering event” is something that would your life better, we can help you clarify and design what would work best for you.
When working with Clients on Key Person Retention Issues we offer some of the following:
- Determine what the cost would be to your business if you couldn’t work for six months to a year.
- Establish a stay bonus document that is tied to the firm’s compensation system.
- Decide who the key people in your company are and how they should be treated as to a variety of issues including retention bonus to stay with the company.
- Work with you to introduce a stay bonus to show your key people how important they are to your company.
- Create financial packages to fund a stay bonus which will assure your key people that money will be available, if needed.
- Develop a recruitment strategy to acquire the most qualified key people for your company if you need talent that is not presently employed at your company.
As with all strategies available to you, we will help you decide which ones would be best for you. If you choose to work on stay bonus issues, we will first make sure we understand how this would make your life better and, second, how it will simplify your life.